Thursday, May 29, 2008

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Mixed Market Signals : Property Buyers Lost ?

Low transaction volume but property price continues to climb, that's what we're seeing in the Singapore property market right now.

Local analysts said "Muted property market situation is temporary ... Bullish property market forecast for next 2 years"; but banks like Barclay and Credit Sussie have forecasted a 40% dip in Singapore property price.

Amidst all these conflicting forecasts and outlooks, one buyer expressed his confusion in a forum post, "Some say up, some say down. I'm having a headache .. buy or not buy?"

Property Buyer lost
"Show me the future ....."

Buy or not buy? Let's face it, either way, it's a gamble.

But always remember that you're placing a bet with your hard-earned money, and perhaps, unearned money; you cannot afford to just skim the headlines and come to a decision.

This is the way I'd go about filtering out the noise.

NUMBER ONE : Don't assume that the experts know better than you.

A lack of confidence in your own judgement and an over-reliance on the so-called expert opinions can be a grave mistake.

Ask yourselves: Did the experts tell you to buy Singapore properties in 2005 or 2006 because they foresaw that property price would double in the following year? If they didn't know better than you did then, why would they now?

According to my own observations, the experts are more often than not to shout "BUY" when price is already sky-high. Then indeed price continues to rocket making it looks like their expert opinions are to be held with high regards, when in fact it is the classic self-fulfilling prophecy playing out itself. A speculative bubble like that is destined to burst. Will you be one of the victims then?

No one else would lose more sleep over your hard-earned money than you. So do your homework and make your own judgement.

NUMBER TWO : When someone says something about the property market, check who's saying it.

In particular, check if the party concerned has a vested interest in the property market.

Let's have a little practical lesson. Read this article from CNA :

Bullish property market forecast for next 2 years; speculators cautioned.

What's the occassion ? (Singapore Press Club talk) Who are making the statements ? (Ku Swee Yong, director of Marketing & Business Development of Savills Singapore, the Prestige Homes & International Marketing team; Tan Tiong Cheng, MD of Knight Frank Singapore; and Winston Liew, a senior investment analyst on Properties at OCBC Investment Research who stands to differ.)

Well ?? ?

NUMBER THREE : Check what the neutral party says

Frankly, I'm not sure if there is really a neutral party. The government is probably closest to it. From MM Lee to Minister Mah, the word is already spelt out for us: P-R-U-D-E-N-C-E. Hey, don't expect them to join the market crash talk like the one we're having here. They have a more important mission of building investors' confidence than teaching naive Singaporeans about the property cycles.

NUMBER FOUR : Know your friends from your foes

A reader of this blog made this comment: "I do see the high prices but somehow don't feel deterred". I must confessed I was like that too when I was young and foolish, until the reality of paying for the mortgage choked me like an iron chain.

There are no good guys and bad guys in the property market, only winners and losers. Join hands with the like-minded people, they'll keep you vigilant when you snooze from the fatigue of what seems like an endless, sometimes even hopeless, wait.

(Just a digression: If we can have collective sales, can we not also have collective purchases ?)

MOST IMPORTANT : Study the economic fundamentals

The most threatening one now is the sustained, high oil price. If oil price stays at this high level for a prolonged period, it will eventually cripple the world's economy. It has already sent prices of commodities and even food, sky-rocketing. This also comes in a time when the global economy is wobbling on the US subprime problem. Though Singapore's economy has shown a great deal of resilience thus far, don't ever be deceived into believing that we have developed an immunity to all global ailments. If there is anything closest to the truth, Singapore as a small city state with no natural resources and has to import everything it needs, Singapore's economy is really more vulnerable than any other countries.


Anonymous said...

I think there is a real disconnect between sellers and potential buyers. IMHO, while all the points you made are valid, until we actually see negative economic data continuously for a few months (and not just news of forecasts for the next few months/year, whomever they are from), sellers are unlikely to reduce their asking prices.

I am looking to buy a resale flat and have been tracking ads and prices for the past 3 months or so for certain condos in the West(transacted at $550-700 psf). Not only have the vast majority of sellers not reduced their asking prices, many are actually asking for 10-20% above transacted prices! They must be reading the same news as us, potential buyers, but there is obviously still plenty of resilience out there among sellers. Perhaps no one wants to be the first to blink, but maybe the news has just not been bad enough.

Smart Property Buyer said...

When I wrote this blog, I was thinking more of the property investors like me who already have a roof over their heads, so waiting it out is no issue.

My guess is that you're a home buyer, probably a first-timer who needs a home quite urgently. I must say that people in this category are the biggest victims of the current property supply crunch.

The bad news is that developers and the sellers are not going to reduce their asking price just because of some negative news.

The good news is that at the current sales volume, the developers especially the smaller ones will, if not already, drop their prices to move sales.

Looking back at the market crash of 1998, any dip in price would come from the developers first. Secondary market will follow suit when economy gets really bad and when their massive retrenchment.

The way I see it, the supply crunch, caused largely by the influx of foreign workers, will ease in 2 to 3 years time as more units are completed. Also with recession looming, we may even see many of these foreign workers heading for homes in the coming months.

Futher, with the weak market sentiment, investors and most certainly speculators are likely to stay out of the market. So the home buyers are really the only buyers left in the market. You may actually have more bargaining power than you think you do. To you I'd say comb the market, you'll find more panicky sellers than you think. You'd need patience and perseverance though.

Buy or not buy, like I've said, either way it's a gamble.

I wish you luck.

Chow Chow said...

I alway believe natural laws.

What goes up, must come down. When separation becomes too far, attraction forces comes stronger. The question now is WHEN is the reversal coming?

The property price is now gaining its peak like in mid 90s before plummetting in 1997. The Asian Financial Crisis was due to a group of speculators. Now there could be another group of speculators, oil? Causing the world pump prices to skyrocket. From 25per barrel to now 130pb for last 2 years.

I hate to be a pessimist but circumstances are signifying me that the 10-year cycle coming, economy will shrink drastically with high inflation and unemployment if the problems of the west is not arrested. Another war outbreak or international crisis will further destablise the future economy.

Just my own opinion, if u can wait, wait another 2 quarters. U will see the effects. But do not expect the price to come down the original price, perhaps a downward adjustment of 20% is possible.

By the way, I am another home buyer too.

Smart Property Buyer said...

Dear Chow Chow,
If we've more tough home buyers like you around who are confident and decisive, we should be seeing a market correction soon.

Like you, I don't enjoy being the doom sayer, but one can hardly ignore the economic turmoils that has been pounding our shore one after another.

Under the mounting pressure of high oil price, slow down in US economy and acute inflation; crack lines are already beginning to show in some weaker economies like those of Philipines, Indonesia and Vietnam. How much longer can the Singapore's economy remain aloof?

Smart Property Buyer said...

Dear hello again,
One more important message for HELLO: You may be looking in the wrong places.

Maybe, I think, you assume that where past transaction shows lower prices are places where you should be combing. You see, if enough people think like you, sellers in these places are going to up their prices.

I'd say try places where speculation is more pervasive. You'd plesantly surprise, I hope, that with the same money you can get something better and newer.

Here's my own experience: In 2006, I went about looking for a property that met my budget. I assumed that with my budget I could only buy smaller property and didn't even bother to view bigger property. It's a grave mistake. I later found that a bigger property was transacted at about the same price as my smaller property for the same development. All's well with me though since prices then were all relatively cheap.

Lesson: Don't allow your assumptions to constraint your property hunting.

hopeful said...

Dear all,
(Original poster Anonymous, now identified as Hopeful, says) thank you for your advice and best wishes. Indeed, I am a home buyer and indeed, I face certain constraints - time and budget being the most obvious ones. Where to buy is also another consideration, as I would like to live near my parents. So while I could probably find something cheaper elsewhere, I am confining myself to looking at "cheaper" developments in not the cheapest area!

I have heard so many pros and cons and agree that now is probably not the best time to buy. But I am also now leaning towards the view that as a non-investor, I should perhaps not worry so much about losing out financially (as long as I don't buy beyond my means or pay higher than recent transacted prices) as I am likely to be staying put for the long term. And while there may be up and down cycles to property prices and economic growth, I believe that for the longer term, it will be an up trend.

I am close to closing a sale for 5-10 per cent less than transacted psf over the past half year or so (not the best floor or view, but something I'm happy with). Will it be a good gamble? I hope so. I apologise if I'm spoiling the market for smart buyers out there.

Smart Property Buyer said...

Dear Hopeful,
Actually I share your sentiment: Home is not about money only.

Otherwise, I'd be making quite a lot of money selling my home now.

5-10% down from last transactions is significant. You just confirm the downtrend forecast.

Don't worry about spoiling the market for the Smart Buyers. "There are many more boats comint", like Minister Mah Bow Tan said. After all, we've the luxury of waiting.

hopeful said...

Well, 5-10% less because it isn't the best unit re floor, view or condition. But I have also done an incredible bit of homework in terms of research and checking ads online and in the papers.

I've learnt so much in the past few months, the least of which is that you'll be best served if you arm yourself with as much information as you can.

Yowe said...

Dear smart property buyer,

I am also looking for my first unit and have been scouting in D23 district hillview area for some time. I have chance upon a unit however the seller is pretty resistant to the pricing. I am seeking your opinion if I should hold on for a better bargain or settle with a relatively high 640sgd/psf?

Smart Property Buyer said...

Dear Yowe,

While buyers have turned cautious over all the negative economic factors, sellers of course would prefer to hold on to the rosy picture of the IRs, F1 .. thing. The way I see it, you are unlikely to find good deals in the secondary marke right now, especially those where you've big devolopers already asking for rocket price. You'll ve to seek out the really desperate speculators or projects of smaller developers. OR you'll ve to wait until the economic situation becomes obviously depressed.

If waiting is not an option for you, then my best advice to you is to comb the market from east to west. Like I said in one of my comments above: Don't let your assumptions constraint your property hunt. Unless of course there are personal reasons that you must buy a home at a certain location.

To buy or not to buy is also a gamble. But if you take a drive down west coast road for example, you'll see "For Sales" and "For Rent" banners hanging all over the place. It's a telling sign.

Anonymous said...

Hi Smart Property Buyer,

I totally agree with your point number 2. Most of the time when the news report that so called "analysts" are still very bullish about the property market, these analysts are property agents themselves! They just want to boost up the sentiment, get people buying, and make a big killing.

On the singapore statistics website, one can find that the average household income for top 15% percentile is around 11k/mth? Subtract the car, maid, children and other expenses, even these top 15% may find it difficult to afford condos at today's prices. I think this is a sign current properties are overpriced...

Link here:

Yowe said...

Hi Smart Property Buyer,

I am glad I have manage to come across your blog and forum to have a more generalised view on the current market sendiments.

Yesterday, I was at the Montrosa Condo @ hillview wanting to close the deal @ 530k SGD. However, there is a serious expectation deviation between the seller and me. The seller refuses to reduce the asking price of 560k SGD when I can only see apparent slowdown in coming months.

I have decided to advocate your call to wait and open up choices. I am glad to have your advise, and heed your opinion. Else, I guess I will be a silly guy who commmitted into another financial turmoil.

Smart Property Buyer said...

I'm especially sympathetic towards the young people, like my own children, who are starting a family. Even HDB is expensive, not to mention those overpriced condos. I bought my HDB at about one tenth today's price but my children are not earning 10 times as much as when I started. It has also become very expensive to raise children here ... sigh!

Smart Property Buyer said...

Dear Yowe,
Good luck !! May I also bring your kind attention to my disclaimer :)

Anonymous said...

Why should seller reduce the price when the rental yield way much higher than the current interest rate? Even if there is no buyer, I simply cannot see why they should drop the price.

I guess one will have to wait until rental return negative yield before price starting to drop, and this won't happen anytime in the near future.

So for those first home buyer who plan to wait. You can forget about the property market for now, just relax and enjoy sharing the space with your parent, family or friends. Invest your money savely. Come back and look at property market after about two years. By that time, you can either buy a place cheaper than today or will never own a property for the rest of your life.

For those who can afford, i.e your saving is larger than the monthly instalment then you should seek out and look for a property. Move in and enjoy your new house. Don't worry about market price, because even if the price drop deep deep by tomorrow. Rest assure the price will come up back within 5-10 years, you can always sell it then.

Smart Property Buyer said...

How the Singapore property market will pan out in the next few years will depend a lot on the global economic situation. One thing for sure, the global economic crisis is looking worse each day.

A severe, prolonged recession looks increasingly likely as surging oil price begins to threaten the global economy. A recession that's probably worse than that of 1997-98 Asian financial crisis is not inconceivable. There may be more job losses and greater fall in income and wealth that was seen during the Asian financial crisis. If the global economy plunges into a severe, prolonged recession; will Singapore's economy be spared?

As for the property market, I'd expect the smaller developers to break the line first (which is already happening). Next will come the speculators who have little holding power (which we'll see as more TOPs come) and may also have problem getting home loans (given the increasinly tight credit policy). Soon the big developers will also find it more profitable to sell at lower prices than hold.

As I've said in an earlier comment, I really do not expect sellers (in the resale market) to want to drop their price just yet. But if Singapore plunges into a recession with substantial job losses, property sellers may find themselves being squeezed from every side - higher vacancy rate, lower rental, higher mortgage rate, banks asking for top ups, and in the worse scenario, find themselves unable to service their home loans. Properties may be put on auctions by the banks at a time with very few buyers. That'll the market crash!

I can understand the distress of home buyers right now with the supply crunch still squeezing them. Statement like "you will never own a property for the rest of your life" does instill a lot of fear among home buyers but home buyers have been repeatedly assured by the government of its commitment to providing affordable housing. Who would home buyers rather believe ?

Buy or not buy is also a risk. Personally I'd say buying at the current high price and economic turmoil would present a higher risk than not buying, especially if one forsees retrenchment.

As for whether property price will come back within 5-10 years, I'd not be so sure. It hasn't for people who bought in the mid 90s, that's what we witness today.

What would Singapore be when we finally emerge from this global crisis? Success of the IRs, or for that matter Singapore as a nation, is not a given fact.

Smart Property Buyer said...


"Why should seller reduce the price when the rental yield way much higher than the current interest rate?"

Here's my response to the question:

Rental yield and interest rate are both not cast in stone. They can change.

My guess is that rental yield will be heading south with increase in vacancy rate, and interest rate will be heading north with increase in inflation rate.

Sellers with greater foresight may want to sell their properties when rental yield is good so that they can find buyers who will pay them good capital gain instead. By the time rental yield does not look attractive, there may be no buyers for your property anymore.

It may also come a time when your rental yield can no longer pay for your mortgage interest, then you'd see no reason to hold on to your property. Will it be too late then?

Anonymous said...

Hi Smart Property Buyer,

(below are my opinion and self experience, please retain from posting it in your blog - which may cause negative influence to others - since we are talking about 2 different markets.

First thank for reply my opinion posted on Jun 7.

The statement "or you will never own a property for the rest of your life" is actually my own experience. I was living in Australia (Melbourne) I had a chance to own the nice double front house in central area back in 1998 - but due to negative yield on the rental, I decided not to. Everyone thought it was a bubble when the price reach at 150% the original price (in 3-6 mths), I was one of those who wait for the price to drop. My sister bought a similar house at 200% of original price & I told her that she must be out of her mind. Beleive it or not, the price now 3-4 times higher than 1998 and it is still going up !!! & rental return is still negative yield for 80% loan !!!. up 3-4 times in 10 years !!! - I really don't understand this.

Anyway, I 've been working in Singapore for 3 years now - the current rental rate is too high. Higher than the monthly installment which urge me to look for a place to buy.

But your comments, make me think again. I thought I have spent enough time doing thinking :)

A few questions, please just answer it straight (no political:), there is no obligation on your side as I am old enough to decide and I am responsible for my decision.

Q1 - When do you think the rental yield will balance with interest rate? 3 mth, 6 mth, 1 year or 2 years

Q2 - I am now look at a place where the rental was 2200 in the bad time, current rental is 4200. If I buy the place now, montly installment is around 3500(interest 1500 + priciple 2000 approximate)
a)With your estimation, when do you think rental price will drop to by 17% i.e 3500? 3 mths, 6 mth, 1 year or 2 year? within the next 2 years, 5 years.
b) With your estimation when do you think the price will drop to 2200 (assuming that interest rate will increase and 2200 will be the interest rate).

Thanks in advance
my email address is:

Smart Property Buyer said...

Dear Anonymous,
The Singapore property market is very different from that of Australia.

The Singapore government has put in place a national policy for home-ownership that is available to all Singaporeans, even among the poor. This is done through a combination of government legislations including the provision of subsidized housing known as HDB, the utilisation of CPF (Central Provident Funds) for buying homes, lump sum subsidy for young couples and recently, for singles too, who choose to live near their parents and housing subsidies for low income Singaporeans. Today about 90% of Singaporeans own their homes.

In the light of soaring property price, the Singapore government has repeatedly assured Singaporeans of ample supply of affordable housing. No doubt we're facing a supply crunch now but the government has said that the housing shortage will be alleviated in 2-3 yrs time.

If you see the Singapore property market in this context, you'll understand that the fear of never being able to own a property for the rest of your life is quite unfounded, at least for Singaporeans.

1) At current property price, rental yield is really only 2-3% for most Singapore properties. The interest rate is ~1%. I'd say for the huge risk that property investment posed, it already doesn't make sense to buy property at current price. If you take into account the mortgage interest, maintenance cost, vacant cost, real estate agent cost etc, the actual rental yield may very well be negative (instead of 2-3%). As for when interest rate will catch up with rental yield, I don't wish to speculate. All I can say is Singapore interest rate tends to go in tandem with US rate and the signal from US FED is that they're now looking at the risk of inflation. Given that oil price has surged to $139 on the back of the weakening US dollar, I think it's reasonable to expect the FED to raise interest rate.

2)(a)I think you can already find properties going at rental of $2.5K -$3.5K in less prime areas right now.

Banks like Barclay and Credit Sussie have forecasted a drop of 40% in the next 2-3 yrs.

Official data has shown that vacancy rate has risen in the last quarter.

We're expecting a supply of 100000 units to in the market by 2010.

Singapore economy is slowing.

Global economic situation is worsening each day.

b)Put all those information together, I'd expect rental for private properties to moderate even before the end of this year.

Btw, I see that you're making your decision largely on the basis of comparing rental cost vs mortgage cost. Should you not also consider the risk of a huge decline property price? Just for your info, in the last Asian financial crisis (1998), Singapore property price plunged by as much as 40%-50%.

Smart Property Buyer said...

Dear Anonymous again,
Just as we were talking about interest rate going up, here comes the news headlines about rising mortgage rate:
No more cheap mortgages as banks raise rates - Straits Times - 10 Jun 2008

Here are some highlights:

Homebuyers would be hard-pressed to find rates fixed on the first year of a mortgage at below 2.68 per cent, as some banks had already raised the rates of certain packages by up to 1 percentage point in recent weeks to as high as 3.98 per cent.

This means new home buyers will have to grapple with much higher costs of borrowing, if they want the certainty of locking in their interest rates for the next few years.

A new customer will fork out about $3,500 more in interest for the first year on a loan of about $500,000, if the rate has been raised by 0.7 percentage point.

A banking analyst said banks had enjoyed a roaring mortgage business in the past year, and some had already hit most of their 2008 targets.‘So, they may now be focusing on credit quality and growing their margins for any new loans,’ he said.

The question on the minds of home owners is whether this fixed-rate mortgage hike is an ominous signal of an eventual rate hike for all other packages. This may cool the already lukewarm property market further.

Anonymous said...

hi. i am now in a huge dilemna over buying or renting. i currently rent a private condo in the hillview area @ $1,650. shld i pay an increased rent of $2,300 or shld i go out & buy a HDB flat right now? (assuming HDB flat value below $500K & commercial loan package).
my feel is that property prices are pretty high right now & i shld rent for another yr 1st. but i was also advised that fluctuations in the HDB resale mkt are minimal & i shld just go ahead & buy. I am still concerned abt capital preservation.

look forward to hear your point of view.

Smart Property Buyer said...

Dear Anonymous above,
Like Minister said, Those who can afford to wait, they’ll wait.”

So the question is whether you can afford to wait on the HDB BTO queue? Prices of HDB BTO are, in my opinion, unlikely to fall. In fact, with inflation, this market segment, being the base-line for housing need, is going to see price going up, unless Singapore's economy is hit by a severe, prolonged recession.

The private property on the other hand has priced itself out of the reach of most home-buyers. So we'd expect price correction in this market segment. With increase in vacancy rate, one would expect rental rate to fall too.

If you don't wish to pay for the increase in rental, try negotiating with your landlord or look for another place.

My best wishes!

novenabuyer said...


I bought a freehold resale condo for own stay in Novena for 900+ psf last year as I though the price was ok and I wanted my own place. I think asking prices now is around 1.1K psf. Should I sell it off and rent instead as I will feel quite silly if prices correct down to 800 psf or less?


Smart Property Buyer said...

Dear novenabuyer,

If I were you, I'd sell it while it's still profitable to do so. I did that in the 1996's peak and in retrospection, it's the best decision that has saved me a lot of money and heartache subsequently.

But, of course, I'm not you and you're the best person to assess your housing needs and risk apetite. I must confess that I'm quite risk averted especially now that I'm a retiree.

Just straight talk from me. Ps exercsie your own judgement.

Anonymous said...

I have never been interested in the property market until now. I am looking to move nearer to my son's school and that means into a more expensive area. I currently have a EC, and with the high price of housing right now, my gut feel is to sell first and wait till the property price drop before buying. However, renting a place in the mean time could cost as much as 30k an annum. I really wonder if its worth the wait.

Smart Property Buyer said...

Dear Anonymous,
It's quite a dilemma.

Maybe you want to take a cue from Jim Rogers (Refer to:

Personally, I'd definitely sell first cause I'd want to make the money first. If I can't buy later at the right price, I can choose to rent or even downgrade while waiting for price to fall. The options are there.

It's too risky to buy first cause you may end up buying high and selling low. I've friends who were caught in this situation during the mid 90s' boom and bust. It's really painful.

Good luck.

Anonymous said...


It is quite a dilemma and thanks for the prompt reply. With Jim Rogers unfortunately, you are talking about properties in the millions. For us, we are looking at properties under a million and it means a difference of a hundred or maybe two hundred thousand dollars if the prediction of the downturn is true. Paying 50k in rental may not be much if you do make a 100-200k for waiting, but you could end up worse of as well. Sigh.....I am also looking at HDB at the moment, and downgrading temporarily, but as with the condos, HDB is quite expensive right now, and it will also lose its value if the market takes a downturn. I spoke to my parents and I can see they are not quite keen to have me in their house *LOL.

I think downgrading would probably be the way for me. Sell first, get a cheap HDB, buy later, and even if the sales of the HDB is at a lower price than I have bought it for, it cannot drop as much as my EC.....can it? I should be still able to make a gain.

Smart Property Buyer said...

Dear Anonymous,
I agree with you. Downgrading is probably is most prudent thing to do (other than living with your parents for while) under your circumstances.

My best wishes.

Anonymous said...

Hi there, if you can give me suggestion on this...

Is this the right time to invest in HDB property? what to consider? please advice.

See below base on my main question:

I am staying together with my family in 4 Room HDB flat(my wife, my kid & my parents). Planning of selling my house (selling price ard:320) & to get sum cash to diversify my investment in 2 HDB flats.(plan to pay cash for the 3 rm flat which will under my parent's ownership & pay bank loan for 4 rm flat under my wife & me).

My question : is this the right time for buying resale flat? & will rent the 3 room flat to get some income...?as i know the rental is very attractive in market now.

Kindly advice & correct me if i am totally wrong.

Many Thanks

Smart Buyer said...

Dear Anonymous,
If I understand you correctly, you're planning to sell your 4-rm HDB and buy a resale 4-rm HDB plus a 3-rm HDB. My question is: why would you want to sell and then buy a 4-rm HDB? Well, if you're planning to do this for non-financial reason such as moving to a place near your children's school, then it's a different consideration. If it's purely for financial gain, I don't see much of your rationale, unless your current 4-rm commands a much higher price than the one you plan to buy. My guess is that you plan to move to a less desirable location. If that's so, it'd depend on how much more money you'd get by moving to a less desirable location, and how much upside in the future potential you see in that other location.

Ps do your calculations carefully. In the process of selling and buying, a substantial cost is incurred for transaction including stamp duty, legal fee, agent fee ... which may leave you no better off financially.

Furthemore, it's been said, property is about location, location, location .. so do consider carefully your move.

Why don't you simply buy another 3-rm HDB while keeping the existing 4-rm HDB ?

HDB rental yield is indeed very attractive. Do bear in mind that HDB requires a min occupation period before owners are entitled to rent their flats.

As for the resales market, if it's the right time to sell, it'd mean it's not the right to buy. So you may want to buy a 3-rm for your parents direct from HDB instead of from the resales market.

My best wishes.

phantasia said...

Dear smart property buyer,

Would like to seek some views on my situation below. I'm considering getting a resale exec condo in D25 for about 500+k. As the EC is reaching the 10 yr mark in about 2 years time, can I expect the price to rise as it'll be fully privatised by then?

On the issue of falling prices, I'm kinda convinced that prices are due south. But for properties like the EC, can we expect substantial fall in the prices? Given that the price of a 1200sqft unit is only about 150k more than a 5 rm hdb flat in the same area.

Thanks for your postings thus far, have learnt much from your blog!

Anonymous said...

To the anonymous poster who wanted to purchase 2 HDB properties. I also do not understand your need to sell the current property to purchase another similar property + an additional 3 room flat. If its because you want to use the money to pay for the downpayment, remember that you will need to keep $45000 in your CPF before you can draw it out for your 2nd property. In addition, there are other costs like stamp duties, lawyer fees, renovations, agent fees which will also be incurred for purchasing and selling (in your case 3 times). I don't know if in the end its worth the investment.

If you do all your sums and still think you will stand to benefit, then its up to you to think if the benefit is worth the effort and risks.

Smart Buyer said...

Dear Anonymouse above,
Singapore is indeed a beautiful place, not for all the modern architecturs, but for caring people like you.

May your kindness brings you much happiness.

Smart Buyer said...

Dear Phantasia,
Nobody knows for sure which way property price will go and I won't pretend that I do. We can only exercise our best judgement.

Personally, I think ECs' prices would not fall substantially unless there's massive layoff, like what we saw in the last Asian financial crisis when prices fell to $2xx psf, below even that of HDB flats. The question therefore is: Do you think there'll be massive retrenchment in the next few years? More importantly, if such an unfortunate situation should arise, what would be your risks? Can you hold through the recession?

An EC at 10 yrs will command the same value as a 99 LH private condo, so if the price you're going to pay is substantially lower than the surrounding 99yr condos, then you will have a competitive advantage.

Just before I sign off, I think it'd not be fair if I don't tell you this: I've just sold off my 99 LH condo having seen how unstable prices can be for this sort of properties. Personally, I prefer to put my money in more stable investment. You may want to read this post on the uncertainties of 99 year LH property:

My best wishes to you.

Anonymous said...

dear smart buyer,

i am currently living in an hdb 5 rm and have 2 yrs more on monthly payments. i am considering to sell and buy a 99yr LH. est sale of 5 rm is $380k and condo is abt $800k. should i make the move now or wait till prices of private property cools down further. i have no problem waiting.

thanks a lot.

Smart Buyer said...

Dear Anonymous,
If I were you, I'd wait.

Best wishes

Anonymous said...

Dear Smart Buyer,

I'm very thankful to have stumbled across your blog. What you blogged is indeed what's going on in my mind at the moment. I'm really confused. I just sold my 99-year LH condo (the only property I have for myself, hubby, maid and 3 dogs) for a small profit ~ $160k.

After I signed on the dotted line, I really panicked. Where am I going to stay? Will the price really rise till beyond reach? Now that oil prices have dropped, will the property market continue to be bullish. What if the property price never falls and I never get the chance to stay in a 'value-for-money' property?

My husband and I have been scouting around for a landed property. Found a place that I really like around Kovan going at 1.3mil (land size 1650). The problem is, the previous transacted price 4 months ago for the same development was less than $1.2mil. The transacted price 1.5 years ago was $1mil.

Should i buy it? What do you think? Please advise. (I know about the disclaimer, just want to hear your point of view.)

Thanks in advance.

Smart Buyer said...

Dear Anonymous,
With the worsening economic situation in Singapore and the impending supply, it'd be hard to think that private property price will not fall.

My view is that it'd not happen with the same degree for all market segments.

In my opinion, 99 LH condos, like the one you just sold, are mostly likely to take the brunt of it.

Good landed properties will always be scarce, as such quite resistance to price drop unless it becomes all hell let loose for the economy.

Most importantly, work out your finances and have in place contingency plans to manage the risk.

Best wishes.
Smart Buyer

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Dear Smartbuyer...

I currently own a 2 rm flat in amk which was bought direct from HDB abt 8 yrs ago due to Selective En-bloc (SERS) scheme on my older flat earlier .. cost only abt 35k then.. Paid that up already.

I had just done a valuation and to my surprise was quoted 170k, and agents say can sell approx 200k. As I am living with my aged parents in another 5 rm flat, seldom go back to the 2 rm one... And the flat is also too small to rent :)

Now what I am puzzled is why the valuation up from 90k - 150k - 170k and more! Is it going up?? Is it the best time to take action and sell it for 200k and take the cash now?? Or will the price appreciate even further as more people downgrade due to crisis?

Thks for advice!

Smart Buyer said...

Dear Anonymous,
Allow me to repharse your question: Should you sell your 2-rm HDB flat now or wait for the property boom (say 10 years later)?

You've to first of all ask yourself a few questions:

1. Do you need the money now or perhaps, in the near future?
If yes, then I guess the answer is start marketing your property and find out for yourself if it can fetch you the desired price.

2. If you don't need the money, then what exactly are you going to do with the it? Are you confident of managing it well?
If not, then it may be better to keep the asset for your retirement.

In my opinion, HDB resale price may continue to climb a little more for the rest of this year, especially for HDB estates that are still relatively cheap but I think we're not very far from the peak already. It's just my guess.

Best wishes.

Red said...

Dear Smart Property Buyer,

This is indeed an interesting topic. From the argument seen, the economics in statistical point of view is slowing and notably that HDB properties may have seen smaller grow in pricing but it is not seen as signs of slowing down.

What puzzles me is that there is assumption that HDB prices will drop like 1998? Honestly, I would argue that it will not drop instead it will continue to maintain. Why? Inflation that translate to the high cost of materials. The same argument can also be applied with simple bowl of noodle. Then 10 yrs ago, a bowl of noodle is 1.50, now it is 3.00. In a crisis, will it drop to 1.50? No it wont, because, the cost of bowl of noodles itself exceed 1.50. Also, then years ago, price of sand and concrete were cheap, now it is high. There is not enough supply to meet demand.

If today there is a downturn, what is the economics rational that makes the housing will drop. Fact it will not as the rental yeild in housing too good and there is so many more foreigners looking for properties to stay. Do note in mind, there is enough project in Singapore over the next 5 years to generate high FDIs. Means, people will still flood into Sg and still needs a place over their head.

My 2 cents, I dont think there is going to be any significant drop why because the asking prices for properties will continue to be supported by demands.


Smart Buyer said...

Dear Red,
Personally, I do not see HDB price dropping like the 1998 Asian Financial Crisis.

As for inflation being a reason for higher property price, I'd say in the long run, this is always true; but the time-value of money has also shrunk. Hence, whether property is a good hedge against inflation would depend on your entry price. If you've bought at and below the median price, it probably will be a good hedge. In this respect, I think our government would want to make HDB flats' value to be a good hedge, so buying HDB flats from the government should be a relatively good bet in the long run.

I can't say the same for private property. It's too bloated now with all the speculation of the last few years. In a cautious market, if demand is priced out of affordability, then demand will start downgrading. That's exactly what we're seeing now. So, I'd not count on demand to support any level of pricing.

While you expect demand to remain or increase which may or may not materialise given the deterioriating global economy, we all know that supply is definitely increasing.

Just some of my thoughts.


Anonymous said...

Hi.. smart property buyer...

Is $600k for a 1200sqft walk-up freehold unit in Northern Singapore worth buying?



Smart Buyer said...

Dear Anonymous,
I understand the urgency of your question but it'd not be fair for me to make a sweeping statement with so little information. Run a check on URA transaction database and check if this falls within the median. Other than that, it'd be on a case-by-case basis such as the condition of the property.

Good Luck

Anonymous said...

Smart property buyer..

Thanks for your quick reply...
Can I email you about the sepecific details?
Or must I share with all?

Haha... I too kiasu...

Anonymous said...

hello every one...i would like to introduce myself ..i am an overseas expat who moved to singapore a year ago and started looking out recently for property to buy as rentals started to rise all around me..i was advised to follow ur forum and since then have been impressed with all the wonderful tips exchanged in this portal..thanks to all the my dilemma...i want to buy a property and my choices are quite limited(not a PR yet) a potential investment which is better- a private house or a freehold condo or in the current times is a resale HDB a better what areas do u guys feel will have a better investment potential in the future...another query is my monthly income is S$ should i gamble away $5000/mth towards a home loan on a private house or is it better to invest it in 2 resale HDB flats in good locations...ur advise in this issues will be greatly appreciated...thanks again for all the help u have extended to many many youngsters like me who are still looking forward to our first dream house...

Anonymous said...

I am looking to buy a freehold or a 999yr lease private apartment with 3-4 bedrooms to stay for a few years(2-3yrs) and then rent out or resale.what r my options at the moment with respect to the following issues(1) areas which are currently developing and may attain a good rental yield potential in the next few years(2) whats the average psf rate for new as well as resale properties in these areas(3) I am not a PR so can i invest in private landed properties, if so what is the investment potential for such properties(4)what r the things i should as a buyer look in a property to enhance its rental/resale value in the future(5)with the current stalemate in the property prices what is the chances of it coming down in the near future(6)another thing which has been said repeatedly in this forum is the talk of small developers..can anyone please help in compling the list of small medium and heavy duty developers and their developments so that the visiters of this portal may know and follow the trends specifically for these developers...Thanks and hoping to hear from u soon.

Smart Buyer said...

Dear readers,

Your comments are welcome.

Smart Buyer

Anonymous said...

Dear Smart Buyer...

I asked about the Northern freehold walk-up unit going for $630k instead of $600k.

After reading much from your blog.. I decided to heed your advice of "Let Wait & Hold"!!

It's time for the property market to come down to a realistic & reasonable price..

Your blog is very informative & enlightening..

Thanks so much..

Will check-out more with you often until I finally get our dream home.
We're not for speculation but more of staying & hopefully by retirement, we have some money.. hee.

We are intending to get only Freehold or 999yrs unit.
Should be a safe decision right?

Thanks so much...


Smart Buyer said...

Dear bbNotions,
I'm truly encouraged that you find this blog helpful.

What I'm trying to advocate to home buyers in this blog is a "down-to-earth" approach in buying their homes.

"Fear" is a disastrous element in home buying. It can make you over-pay or worse, over-commit, yourself financially.

The fear that property price will continue to rise can be very real for home hunter in the existing tight market. But just cast your sight a little further, you'd see the enormous supply that's coming. In the private property supply, we're talking about something like 100,000 units in the pipeline. With an average take-up of 7000 units per year as indicated by past records, you'd see how long it'd take to absorb that supply. Developers may hold back launches but they cannot do that indefinitely.

So that fear is irrational.

If you can wait, then wait for more supply to come on stream. If you can't wait, then buy within your means. Don't buy because you fear price will go up and that you'll never be able to afford one. Don't buy because you've been led to believe that property price is going to go up forever and you'd definitely reap a huge profit, when in reality you've just been burdened by a huge mortgage.

Like Minsiter Mah said "let others rush". For sure, property price cannot go up forever. The higher it goes, the harder it crashes.

My best wishes to you and all home hunters out there.

Smart Buyer said...

Dear Oversea Expat,

You asked, "my monthly income is S$ should i gamble away $5000/mth towards a home loan". As a rule of thumb, one should not spend more that a third of his income on home loan, which in your case is no more than $3000/mth.

You also asked if you should buy a resale HDB. Let me clarify this, only Singapore citizens and PR (permanent residents) can eligible according to HDB policy.

Assuming you're eligible, you should be informed that HDB resale price is all time high, so is private property price. Do consider the risk of buying at the peak of a property cycle.

Youngster, don't gamble your hard-earned money away. When that reality hits you, it'd simply be too painful:(

Best wishes.

Anonymous said...

To the young, oversea expat,
don't buy, wait. unless you don't care about money. but from what you said, you want to save money and do investment. NOW IS NOT THE TIME. WAIT.

Smart Buyer said...

Dear young overseas expat again,

Btw, each eligible household is allowed to buy only ONE HDB flat.

Anonymous said...

Thanks to all the wonderful gentlemen who have replied to my mail...i do get ur point...well def wait and see...and btw i had applied for a PR and am waiting for it and my wife and parents are already PRs...ur forum has indeed helped quite a lot of youngsters like myself make a well informed decision of our lifes(a new home of our own!!!)...right now i am quite new...but if there there is anything i can do for the betterment of this forum...please feel free to post...i will def try to do my best...thanks again..
PS:- following ur advice i am indeed zeroed in on jurong east area as a good investment and focusing on a few freehold apartments in the area...will wait and watch...and try for a good deal when the price comes down...cheers...

Smart Buyer said...

Dear Newcomer,
Thank you very much for your support.

You can help promote our cause by recommending the site to your friends and asking them to link their sites to this site. You can also post your views and other helpful information for the visitors here. In this way, more people can benefit from the information here which is not always available in mainstream news media.

Best wishes to you and your family.

Anonymous said...


I noticed that most of the issues are concentrated on private properties. What about public housing like HDB?

I mean the newly released flats cost half a million for those with a combined income of under 8k. Resale flats seem cheaper.

Has HDB reached it's peak yet? I'm just married and tried balloting 3 times to no avail. We did not even get the chance to go down to hdb to choose a flat. And the prices has gone too high since we started balloting. From 195k to 300k+ for a 4 room flat.

Should we wait out or ballot for this round anyway? Since private property is sliding, can we also assume that HDB flats will follow the buckling trend?

Smart Buyer said...

Dear Anonymous,
If this economic downturn becomes a severe, prolonged recession (which cannot be discounted), then HDB resale market will eventually be hit, though I'd expect it not to be as severe as private property, namely because HDB market has less of the speculative element present in private property market. As you probably already know, HDB is leaning on the safe side of "not over building" which has the undesirable effect of squeezing desperate home buyers like you.

Why don't you do both: continue to try your luck on the HDB new flat ballot and look for a good deal in the resale market? Then decide which is better when it comes.

Anonymous said...

Thanks Smart Buyer. I will think through your advice.

We are just surprised by the stance taken by HDB given that the government is promoting pro-family policies.

We do not think that the price of new flats will fall drastically. HDB will probably maintain the price. We are just wondering why HDB thinks that 400k+ for a new 4 room HDB flat is affordable for families whose combined income is below 8k?

And most of our friends do think it is ridiculous to queue 3yrs for a flat. Courtship of 2 yrs, propose, wait 3yrs for a flat. By that time, the ladies are probably too old to create a family.

And even right now, the resale market is so strong and sellers are still asking for 30k COV. No new flats and no resale flats. You are right, desperate home owners like us are cornered into a tight spot.

Smart Buyer said...

Hi again,
You've my sympathy. I do hope our government will understand the plight of young people like you. I can see that all this is not pro-family.

Well, I must clarify this though. I don't think it is government's intention to deliberately squeeze desperate home hunters like you. I don't know if you are aware of this: HDB over built in the mid 90s and when the Asian financial crisis erupted, HDB price fell at historical rate with the weight of the over-supply. Many unsold HDB flats lie vacant for years and some still remain today. It's a "mistake" that HDB does not want to repeat, I supposed. Unfortunately their cautious approach has got young people like you caught. I think HDB is aware of this. HDB Chief has recently assured the public that it'll build more flats next year to meet demand.

I'd expect the public housing shortage to ease within a year or two. It will come and it's wonderful to own your first home.

Cheer up!

Anonymous said...


Anonymous said...

Thanks Smart Buyer for the info. from "property buyers" perspective. It's true that we don't always get this from the mainstream media which is mainly mouthpiece of the government, the developers and all the rich and famous. Commoners just get "con".

joel said...

hi smart buyer, thanks for this blog. i appreciate your advice. i'm thinking of buying a fh condo unit when the price goes down. if the price is $800k, what are various expenses and how much cash/cpf do i need to have if i take 80% bank loan? thanks a lot.

Anonymous said...

Dear Smart Buyer:)

I cannot tell you how grateful I am to have found your blog as I was searching through sites :)

Am requesting your view on this question. Many thanks in advance.

I am a foreigner, currently in a Condo, Parc Oasis, paying a rent of S$2200 for a 3 bedroom. I am not a PR.

My rental is up for review the next month and the asking price for a 2 Bedroom is S$2800K and 3bedroom is S$3500K. So I need to decide.

This made me think of buying a house (my first one) and indeed I would use it/ rent it, keeping a medium longer horizon in mind (at least 5-8 years).

I have zeroed on a 3bedroom in a Condo, Parc Oasis in Jurong east. The price is S$760/770K at approx 550 per sqft.

Now I scouted for home loans and EMIs (looking at a EMI of less than 35%). The result is that the EMI + maintenance and property tax for this property is below the rent I will be forced to pay if I renew my current lease.

I do like the house, but reading your blog has made me take a double take.

My personal impression was that in the long run, property prices for good, convenient locations will be Ok. But I do agree with you that Singapore is heading for a recession. Technically it is already in one.

But you see, my need is immediate. I either lock in the rent for a year (checked options and even the lowest rent for other 2bedroom houses is S$2500K) or alternatively take the chance and buy. At least I will shore up the asset.

My condo's, Parc Oasis's, price has been relatively stable the past year. This is Parc Oasis, bang opposite the Chinese Garden MRT and with the Jurong lake area being developed, it is a good location. I must tell you though that its a 99year lease with 13 years down.

To be honest, I had almost decided to buy it, but your blog is making me nervous and re-think.

What are your views?

Once again thank you for your time and patience...I really wrote a lot.


Expat Buyer PO

Smart Buyer said...

Talk to your conservancy lawyer and banker about the financing of your property. They're the best people to advise you. Do not place any option money until you know exactly how you are going to finance the purchase of your property.

Good luck.

Smart Buyer said...

Dear Expat Buyer PO,
I'm not in the position to advice you about a specific purchase. I believe there's already sufficient information about the outlook of the Singapore private property market here. The rest is really up to you. I can only tell you that if I were you, I'd wait.

Best wishes

Anonymous said...

Dear Smart Buyer,

A delight to come accross your blog, you are very insightful.

A few questions...knowing that I will wait a few quarters before deciding to buy my first home in SG...but want to have a shortlist of a few on hand.

1. I am a PR, used to rent near orchard, now near Tanjong Rhu. I work near Bugis, dont drive, but take cabs a lot. I am open to any location in sg, prefer a condo/private, but more familiar with orchard, newton, lower bukit timah and meyer road/ amber . Which top 3 locations from the above or anywhere else(but convenient enough to cab to work)would you suggest I look?

2. Is it advisable to consider a 20 year old 99y property? or strictly freehold? not even new 99y?

3. In the last crisis of 2007-8, I know prices fell 50% in sg...did banks ask people who were paying installments regularly...also to top up loans? did this happen in hdb also? did people get kicked out?

4. Since sg only guarantees 20k fd's, and I have significantly more, incase sg banks fail(nowadays no one knows the probability) do you think the sg gv will pay back??..)) can i safeguard?

thanks very much

Smart Buyer said...

Dear Anonymous,
Thank you for your support.

1. I don't know what your priorities are - to save on rent, time or what - so I'm unable to advise you.

2. I've done some systematic analysis on the depreciation of 99-LH property but they're all over the blog. Kindly do a search on the topic.

3. You meant the Asian Financial Crisis in 1997-1998 right? Yes, property owners were required by their banks to top up their loans. In fact, property owners were squeezed from all sides - increasing mortgage rate, falling rent and property price, rising vacancy, surging retrenchment - it was bad. HDB was more tolerant towards defaulters than banks.

4. Personally, I don't worry about bank failures here. Banks here are well-capitalised. Besides, Singapore has a huge national reserve. Our sovereign funds have bought into failing US banks like Merrill. I don't see a problem of us buying up our local banks, though I don't think we'll ever come to that. In fact, I can imagine if we were to have a severe housing bubble crisis, our government can simply buy up the properties, at half-price or lower of course :) and then sell them cheap to the poor home-buyers here.
Just a joke.

Best wishes

Anonymous said...

Thanks Smart Buyer, in relation to point 1, the idea is generally not to waste more money in rent, since ive been renting for about 8 years so far, and intend (given job situation) to be here at least for 5 years more.

Will search this blog on point2

About point4, thats exactly my point...gv will act in its own interest...and in the event of a bank failure, do u seriously think the gv will save peoples deposits above 20k?

Anonymous said...

i need your advise! i has just done the valuation of my 4 room hdb hougang flat. I read it is not a gd time to buy but i need to sell as my other property has TOP and i need to sell my flat within 6 months as i have wiped out my cpf to buy the 2nd property in 2006.

now might be the recession
should i
1) appeal to HDB to let me wait and sell later?

2) can i return the money i used from CPF and own 2 properies. maybe stay in my hdb n rent out my private?

3) what is the wisest thing to do if i move to my private apt? to try to repay it as fast as i can? i have 1 yr period that i have to pay the fixed interest but after 1 year i can try to return as much as i can.

4) in my mid 30s, will it be wise not to renovate the new apt but keep it simple if we are living on 1 income and has not much savings at the end of the month.

i personally feel the pain of paying 300 a month on the pte apt maintenance.I don not even own a car. i always believe in the principle of save first spend later but it is not something even my spouse accepts.

Smart Buyer said...

1)Let me show you a rough calculation for a 99 LH new property priced at about $1M. You are likely to pay approx double that with a 30-yr mortgage, i.e.
$2M. If you divide $2M over 100 years (rounding up the 99 years lease), it costs you $20,000 per year which is not significantly less than if you rent, and given that when you rent, your landlord assumes all the risks, pay for maintenance and repair costs, sinking funds which can be exorbitant when the building gets old and if the building remains habitable throughout the 99 years... Now that should give you some idea that renting is not necessarily less attractive than buying when purchase price is very high like now. You may assume that you can sell at a profit in 5 years time when you leave but what if you can't? Are you willing to sell it at a loss? If not, have you thought of the problems of managing the property in your absence?

4)It's in the interest of the government that the country's banking system does not fail under any circumstances. Defaulting on depositors on a national scale will unquestionably result in the collapse of the country's economy and most likely its government. No, I can't see such a thing ever happening here.

Did you see how angry people were in Hong Kong over their loss on Lehman's bankruptcy? That's just a handful of people. Imagine the entire population in that catastrophe!

You've the guarantee of our huge national reserve and a government of high integrity, I think that should suffice.


Smart Buyer said...

Dear Anonymous on the Hougang Flat,

There is no need for you to sell your HDB flat. You can own a HDB flat and as many private properties as you want. However, you need to seek approval from HDB to buy a private property as a procedure (HDB will normally approve.)
You may stay in your private property and rent out your HDB flat if you have complete the min occupation period, ie. 5 years if you have bought the flat from HDB and 3 year if you have bought it from the resale market.
If you have not completed the min occupation period of your HDB flat, then you will have to stay in your HDB and rent out your private apt.


Anonymous said...

thanks for your reply. i had used my CPF to buy the pte property. is there a need to return the money back to CPF in order to own 2 properties? or just need a special approval from HDB? is there a need to ask HDB permission to rent out the whole flat?

thanks so much

Smart Buyer said...

Using CPF for housing falls under CPF rules. You can check your doubt with them. I don't understand your question. You'll only have to put the money you withdrew for housing from your CPF account when you sell the said property.

Buying private property and renting the whole of your HDB flat will need the approval of HDB.

Best wishes.

Anonymous said...

Thanks Smart Buyer,

The reason I asked the q is because specifications questions have been asked to you by others and you have replied to them, without any problems, for example the person who just wrote in after me. So I wonder why my q was singled out as a specific question.

Anyways, if you think you cannot help me, thats fine.


Expat Buyer PO

Anonymous said...

sorry to confuse you. i was told i need to sell the flat within 6 mths after my pte property TOP. but due to the recession i am worried that the price might not be too good. I will check wtih CPF if i need to sell my flat so that i can use my CPF to pay for my pte property as well. I heard that there is a new ruling of putting a Minimum sum of 105k in our cpf?
i will come by and learn from you. thanks for this website!

Smart Buyer said...

Dear Expat Buyer PO,
"Specific buy" refers to your personal choice of the unit in Parc Oasis you're talking about.

Well, I can discuss about general market trends but I don't know all the properties in Singapore to go into discussion specific projects.

Yes, you're right that people did ask me if they should buy Tiong Bahru or Hougang or whatever .. but I can only tell them about my gut feel of the general trends.

Besides, "One man's meat is another man's poison". It's really difficult for me to say if you should buy that particular unit in Parc Oasis.

You see, I'm really not that smart :(

Just here to caution people about over-committing to their properties. A mistake in a major financial commitment like buying a property can set you back permanently in your financial investment.

Best wishes for your home search.

danny said...

Dear SPB,

I hate your blog! You are providing valuable information to people that would otherwise make foolish decisions. Clearly, I cannot profit from unmade foolish decisions. It is apparent that the pearls of wisdom you are spreading has already cautioned many a foolish buyer to instead exercise prudence!

How dare you undermine the efforts of sale "EXPERTS" who are hastening the crash by encouraging people to "buy-now-before-it-goes-even-higher". Just because these so called "EXPERTS" have been wrong in their predictions earlier this year by claiming that prices will continue to rise for the next 2 years when in fact the latest URA results proved that prices have peaked and are softening, thereby making the experts technically wrong, and you technically right, does not give you the authority to question them and make their life more difficult! Do you know how difficult it is for them to stand up to scrutiny!

Let me illustrate this point clearly with a personal example. A certain Mr. Wang of X property agency, has promised that HDB prices will continue to rise, even though its already $500 psf (at Dover) it will rise by another 15% to about $575 next year and will absolutely not be affected by private condo prices reclining. (eg. if a $650 psf condo falls 20% to $520) people will still pay more for the HDB even though it's older, with an inferior design. Do you realize the years of training to blatantly ignore reality and the gall it requires to make such statements? Mr. Wang has 2 children, a BMW and a rolex wearing habit to support. Blogs like yours are making it difficult for him to make a living.

From your blog postings, I know that you are concerned about the welfare of others over committing to property. Do have a heart for the suffering of Mr. Wang. I'm sure he will be devastated to down grade to a Toyota and a Tag Heuer.

I urge you, as a fellow prudent buyer that will profit from a property crash to shutdown your blog for good!

Anonymous said...


I am currently own a flat in the north. I have been looking for a flat in Potong Pasir for a while, to live near my in law's place and also reduce the travel time for me and my wife to our work place and we have enrolled our children to a near by primary sch. The valuation price in the PP area is still on the uptrend, recently a 3 rm can value clse to 300K. My questions are (1) Should I sell my current HDB flat now and buy the resale falt now (2) should I sell my HDB flat now and stay with my in law, wait for the resale price to fall and purchase later and how long to wait ? May also consider private condo near that area if prices are reasonable.

Just to get some opinion. Thank you.

Smart Buyer said...

1) It'd be much safer if you "sell" first, then plan the next step, that's the "buy" part.
2) It's good if your in-laws don't mind do that gives you the time to look for a flat in Potong Pasir

Best wishes

Smart Buyer said...

Dear Danny (who hates my blog),

Last Sunday, I saw a TV documentary about how young Americans were driven to suicide by their mounting debts and how the working-class Americans would have no hope of ever becoming debt-free while the rich gets richer; I was choked with indignant.

When the bubbles of the capitalists' greed and fear burst, guess who suffer?

Despite the daily verbal abuses I received from people like "Mr Wang", I cannot close down the blog.

Best wishes.

sumo22 said...

Dear Smart Buyer,

You had advocated that 99-year pty/condo are time-bombs. May I ask if this applies to developments that are above or next to MRT stations? Eg: what do you think of Kovan Residences next to Kovan MRT?

I believe its not the right time to buy now but do you think it will be a good buy if price falls by say, 10 to 15% next year? Currently it is selling at about 810 psf. Thanks for your guidance & I understand the disclaimer so pls feel free to comment. Thanks in advance!

Smart Buyer said...

Dear Sumo22,
It is incorrect to say that I've "advocated that 99-year pty/condo are time-bombs."

From my own experience and observation, I'm of the view that 99-year property is largely a consumption good esp at currect price level, rather than a long term investment.

I'd like to refrain from making comments on specific projects as that can be sensitive.

I can only tell you that in the last Asian financial crisis, 99-LH condos in suburbs were sold at as low as $3xx psf.

You'd have to decide for yourself if you think the current financial crisis will have worse impact on the private property price than the 97-Asian financial crisis.

More importantly, you should be thoroughly honest with yourself about your own financial risk in the event of a prolonged, severe recession here in Singapore which PM Lee has said may last to 2010.

Best wishes.

Anonymous said...

Dear Smart Buyer,

Chanced on your informative blog while on another website.

I am looking to upgrade from a 4rm hdb to a new condo eventually. I bought my new 94sq m unit in 2001 for 170k and it already feels crowded after 3 kids and one maid! This is my first property and it should be paid up around 2010. My idea of getting a condo is to sell it off much later when the kids have grown and downgrade to a 2nd hdb flat, then enjoy traveling around the world. =)

I do have the following queries:

1. Should I wait till 2010 when there may be pickings from those who bought new condo units on deferred TOPs, or maybe even later as the economy starts to tank further? Are there enough of these units in 2010 to result in a small but modest upswing in prices for a short while thereafter?

2. I hope to get a 5-room equivalent condo unit for around 700-800k eventually. Is this just plain dreaming or achievable?

3. Is a freehold property better? Is it more expensive? Or will any change in the economy affect the designation of the property as such?

4. If the global financial crisis is so bad such that both salaries and property prices plummet, how is our property market going to be affected since banks will see more and more loan defaulters?

Apologies if the questions sound very ignorant. I just hope to have a roof over my head without busting my budget. No point having a home but no family.

Thanks for the advice.

Smart Buyer said...

1. I don't think that there's anyone who can time the market precisely. Rather than focus on waiting for 2010, I'd say pay attention to the price of the category of property you're looking at. Buy if you think it's a value buy. (You may want to refer to Warren Buffet's margin of safety to help you decide on a value buy.)

2. Condo of 5-rm size going at $800K is likely to be old 99LH condo but they may be difficult to sell, so do consider the problem.

3. In general, freehold is better than leasehold. I'd think increasingly so as freehold land becomes increasingly scarce. For detail on comparing freehold vs leasehold, ps do a blog search for other relevant posts.

4. The current financial crisis is putting a lot of downward pressure on property price, in particular, private property price. Some analysts say this crisis is likely to be worse than 97-Asian financial crisis.

Best wishes.

Anonymous said...

Hi smart buyer,

Currently lot of HDB are selling at value and below value. Is this the sight of downstrend of HDB market?

Currently paying rental of $1000 per month. Is it worth to own a HDB now. If live go well in singapore, this unit can be my permanent home. Otherwise it can be my investment when i sell it before i leave the country. Basiccaly my Q are:
1) continue to rent or buy
2) 5 room flat below 350K sell at value, worth to buy now?
3) Any recommended time to buy and range if possible?

Sometime Q are too much for u. But we tend to think you are genius or better than us. Please try to advise as much possible.

Thanks for your advice,
Your admirer

Smart Buyer said...

Dearest Admirer,
I'm flattered by your admiration. Very thoughtful of you to say little nice things like that, it makes the world a lot happier.

Back to your questions:
1. Eventually it makes sense to buy than rent.
2. $350K for a 5-rm flat seems reasonable. Check for problems though.
3. Next year might be better if you're looking for a bargain.

Best wishes.

Anonymous said...

Dear Smart Buyer

I am in my mid 30s and currently own a 5 room flat valued at approx $350,000 (I bought it at $250,000). My remaining loan is at about 90k. My spouse and I are thinking of selling the flat and buying a 2 room freehold condo at around Thomson / Upper Bukit Timah that costs around $600,000. We started out thinking that it's pure fantasy on our part but to our surprise, we found some around that price.

The purpose of the buying the property is for long stay till our 50s and then hopefully to sell it at a decent profit and downgrade to a HDB resale. The money left over from the purchase of the resale HDB will go to our retirement egg nest.

Would you provide any advice as to ususally how much difference does a HDB property appreciate vs a freehold property? I am not sure whether I will be better off hanging on to my current HDB flat and sell it in my 50s which may earn me the same amount (or more) profit as compared to buying a freehold property with its accompanying loan obligations and end up selling at the same profit as my HDB flat.

We are quite indifferent to the apartment size and condo facilities so we are unconcerned about the intangible benefits (pool, gym etc) that living in a condo has. Our main objective is long term investment for retirement. Would really appreciate your insight on this.


Marina Baby said...

Dear Smart Buyer,

Past trends indicate that old 99 LH condos (in general) are difficult to sell, which you have clearly pointed out.

In light of the above, I'm keen to find out what you think ... specifically, about the three 99 LH condos at the upcoming Marina Bay District 1 Area - the Sail, Marina Bay Residences, Marina Bay Suites - all of which are in close proximity to key city elements, i.e. Raffles Place, MRT.

I agree with you on the depreciation aspect.

But do you think these 99 LH Marina Bay Condos will become difficult to SELL when they eventually do become old in 2020-2030?

Smart Buyer said...

Dear Marina Baby,
The question is whether you can sell 99LH Marina Bay condos at a profit given its selling price is already rather steep now. It really depends on what wealth the Marina Bay district will be able to generate. Who can say for sure? Who can even know what Singapore will be like then?

Perhaps you should focus on your immediate affordability and risk of buying a property there, rather than speculate on its prospect. After all, if you run into a cash-flow problem in the near term, then there is no future to talk about.

Smart Buyer said...

Dear Anonymous who's thinking of selling your 5-rm HDB and buying a freehold property.

Here are a few points for you to consider for buying the freehold property:

1. Financing the purchase of your freehold property - how comfortable are you with that? Do you have holding power?

2. You don't use condo facilities, so do you like the idea of paying the monthly maintenance and sinking funds esp if you should stop working one day?

3. Property price goes up and down. The important thing is to ensure that you've holding power so that you can choose to sell your FH property only in boom time.

Freehold property will likely appreciate in the long term provided that appreciation is not all going to the bank :)

Smart Buyer said...

Dear Marina Baby again,
Some thoughts just come to mind which I'll like to get them off my chest.

Based on my own experience, I'd say we have a tendency to be too optimistic at the time of buying a property. We get carried away by the emotional appeal of the property. There's the risk of down playing our risks at this stage which often dawn us only after the decision is made.

So I choose to play the devil's advocate here, making people think of the other not-so-happy ending which an excited buyer would rather not think about.

People are still highly sold to the Marina Bay magic and all its promises. Here's the devil speaking again: I'm not so sure about that ( I know many people are despite the economic downturn).

Just think of Las Vegas Sands. Who would have thought that it's share price would have plunged from close to $150 to a mere $5? So who could be sure of the gaming business anymore?

Because people should not be too sure of anything, they should therefore consider the risks when the outcome is contrary to expectation and be prepared for that.

So balance GREED with an equal dose of FEAR.

Marina Baby said...

Hello Smart Buyer,

Thank you for writing back. I have extensively considered everything you've written.

As a conservative investor, I will probably not buy into a 99 LH property, even if its The Sail, because of its depreciating value.

I could be wrong and buying into a 99 LH simply because of the marina bay story could be the best thing ever.

But ultimately, a 99 LH is essentially, mostly for consumption, not primarily for investment.

Reading your articles has knocked some sense into me. So by and large, I would rather stick to the fundamentals - a 999 LH or Freehold.

No 99 LH properties, even if theyre in Marina Bay. My reasons are as follows :

1) Condos at marina bay may be easy to rent tout over the long haul, but I am concerned abou whether it may be just as easy to sell a 99 LH after 10 - 20 years later at a reasonably good profit when people start thinking about the depreciating factor.

2) Even leasing could be a problem. I spoke to 2 real estate agents today, both of whom put out ads to lease out a couple of units from The Sail, all of which had great views. For over 2 months (Sept - Nov), those agents have had no calls at all. Zero.

3) The Sail has an unusually high capacity - 1100 units. On top of that, there are a lot more units in the pipeline from Marina Bay Residences & Suites. How easy is it going to rent out over hundreds to thousands of units when the *majority* of the foreigners working in the IR and MBFC are going to be average paid service workers? Only a select handful will be well paid enough to afford luxury housing. If the un-rented luxury property market in Shanghai at one point reached a high of 30% to 35%, the same could happen to Singapore.

4) 100,000 more units are coming into market with an annual pickup rate of just 7,000 units per annum. If supply keeps going up in the next few years, prices can only be heading in one direction, in the near term.

Those points are essentially the reasons why I'm avoiding all 99 LH properties, no matter how exciting / promising they may appear to be.

Nothing beats sticking to the tried and proven fundamentals.

Anonymous said...

Hello smart buyer,

I don't have a specific question, but I just wanted to commend your blog and the in depth insights provided. I've just graduated and started working, and I hope to own a residential property in Singapore after 2010/2011. So I'm starting to do my Singapore property research now. I have never come across such a comprehensive coverage on the Singapore property market, and I thank you for enlightening readers like me who want to know more :) Keep up the good work!

Smart Buyer said...

Thank you very much for your encouragement! One of my children is very much like you, just graduated and starting out in life. I offer my advice to my children like the way I do here. You see, old people just like to offer their advice :) It makes them feel useful.

And intelligent youngsters (like you) would know that it's much cheaper to learn from the experience of their elders than through the hard knocks of life and possibly, losing their hard-earned money in the process.

Best wishes to a happy and successful life.

Anonymous said...

Hellp Smart Buyer,

What is you opinion on FH property in gelyang loring 28. I heard banks will not give loan for such properties. What are the risk on investment returns on such properties.


Anonymous said...

Dear Smart Buyer:

Thank you for sharing your insights and views.

One thing is not mentioned. There is chance of old HDB flat being 'enbloc'. The chance of happening is especially high for 10 storey flats in areas close to town...

Smart Buyer said...

Dear Seng,
I've viewed some of the freehold properties there: greatest attraction is cheap. But they are not cheap for no reason. You'd probably have problem getting a bank loan. If you are thinking of staying there, take note that it's generally unsuitable for family-people. If you are thinking of buying a rental property, you may be dealing with certain category of tenants. The greatest risk is of course the difficulty of selling such a property.

Do consider carefully.

Anonymous said...

Hi Smart Buyer

Ditto your point on en bloc sales. There should be bulk purchasing too ...

With reference to one of your articles, we can see 2 key adjustment period.

1 during Asian Financial crisis and 1 during SARS. Going by the "experts' predictions" the coming crisis to be the worse in 30 years. There should be an adjustment soon then ...

But it seems to impact pte housing more than public. So for those buying HDB, this adjustment would perhaps be minimal.

We'll just have to wait and observe I guess...

Ms Jaded

Anonymous said...

Dear Smart Buyer,

Thanks for the advise, that's exactly what I am concerned. Anyway, I am diverting my attention to City Square. Wonder if the situation is the same as gelyang? This is not little india and desker road.


Smart Buyer said...

Hi Seng again,
8 out of 10 friends who have viewed City Square have some reservation about the neighbourhood, and hence, the resaleability. What do you make out of poll?

Waiting said...

Dear Smart Buyer,

What do you think of Oasis Garden at Bunga Rumpai? The units are nice but just not sure about the location. Would it be a good enough time to buy mid next year (scheduled TOP)? This is for stay but like everyone else, I am concerned about capital protection.

Thank you. I always value your opinion.

Smart Buyer said...

Dear Waiting,
Though I like the location of Oasis Garden, for investment purpose, Oasis Garden's current price of $8xx-$9xx psf is steep. Neighbouring Les Crescendo is going $7xx-$8xx psf which is still high for the potential investment yield. The rental market, particularly in the east, will be rather depressed in the coming years. Let's wait and see how the price will go middle of 2009.

As a investor, I'd be very price-sensitive. If you're home buyer, you may have a different yardstick and personal reasons which is hard for me to comment.

Good Luck

Anonymous said...

Hello Smart Buyer!
I would like to ask your expert opinion if value of property will likely appreciate more at Tiong Bahru (eg: Meraprime) where amenities are aplenty or tail-end of river valley (eg: Valley Park) when the market/economy recovers. Thanks.

Smart Buyer said...

Dear Anonymous,
No doubt Meraprime has a good location but the current price a mind-blowing $12xx psf and it's a 99LH property. It reminds me of how hot nearby Central Green was in the mid 90s. Now it's going at about $8xx psf. So you can see a significant discount for older condos in the same locations. You may also like to take note that between 2002-2004, Central Green dropped as low as $4xxpsf. That will give some indication of the risk of entering at a high price.

Valley Park doesn't have the MRT-location of Meraprime but it's FH. Going price is still high at $1xxx psf. Prices fell to about $6xx psf in 2003.

In summary, 99LH property price falls faster in a downturn and with age but commands better rental rate. (If you like more info on comparing 99LH with FH, ps do a blog search here.)

Quite obvously, this is still not the time to enter the market. I don't know if prices will fall to an attractive level for these properties to make good investment value. I'm in no hurry. In fact, I'd simply turn to other types of investment if property remains over-valued. I don't know if you're in the same situation, so I can't tell what you should do.

Who's to know how long it will take the property market to recover? Whether they will appreciate or not, or more importantly by how much, would depend on your purchase price. At the current price level, I can see very little upside and plenty of risk.

Best wishes

Anonymous said...

Dear Smartbuyer,

Mery XMAS to you and thank you for the information sharing and indeed very helpful.

I'm looking for condo for staying, and not sure if now is a right time to buy and whether the location is good and value for money.

Please, would you be able to provide your expert opinion on a properties around Novena, Balestier and a Nova 48 at Prome road, price 9xx-1xxx psf.

Wish a very happy new year too

Smart Buyer said...

Dear Anonymous looking at Novena area,
I won't buy at $9xx-$1xxx psf. In 2004, I was offered a property (FH but older) at about half that price.

A very happy to new year to you too.

Anonymous said...

Dear Smartbuyer,

Thank you for sharing your experiences.

I am 50 living in a paid-up HDB 5-room flat. With the expectation of a major property correction in the near future, I am considering to buy a one-room condo in south-west district for rental instead of leaving my money in the bank. Do you think it is a good idea? I don't intend to take a bank loan. Do you think 500K is sufficient to buy a freehold one-room unit?

Do you think there is a demand for one-room unit in our rental market? What's your opinion about "The Foliage" along Pasir Panjang Road. Is it a good location?

I appreciate your advice.

Smart Buyer said...

From my experience, smaller units like studios are much easier to rent than bigger ones and this is esp important during a downturn.

It's probably a good idea to buy an investment property than leaving the money in the bank, provided your entry price is attractive and the location of your investment property is good. Do a calculation on the rental yield and don't forget to include your costs like maintainance, furnishing, sinking funds, agent fees, property tax and possible vacant periods.

Don't know about "The Foliage". Why don't you share your views.

I know of FH 3-room condos less than 10 yr old going below $500K in the last downturn. Will such bargain ever come back again? I don't know.

Best wishes.

Anonymous said...

Dear all,

have enjoyed the information you have all posted,including the fears and concerns.

I am also on the lookout for a property amidst this gloom,and would think that the current prices does not fully reflect the gloom we are 30% maximum of a typical household income,the mortgage to pay each month will be 2-3k presuming most are in the two income family unit earning $8000-$10,000 per month.
With the majority of prices across the island of $600-1000 psft for mass market relatively condominiums,the prics is stil a tad above affordability unless buyers are ready to stretch themselves in this crisis,considering the loss of jobs coming in the months ahead for the economy like this.
I for myself hesitates to enter now,with the falling prices I expect to be mor severe in 6 months time after all corporate earnings results are out,and the sellers high expectations,and the economic uncertainties ahead.
As one says,better to have the cash in hand then liabilites in land....
Having said that,for those who have no choice but to buy now if you cannot wait,may your choice be econmically viable,cheers

CondoSearch said...

Dear Smartbuyer,

Happy new year!

I just drop by to say "thank you" for your excellent blog, and safe me from committing at a high price and wrong time buying.

it helps me a small property hunter(with hard earning money) and others(i believed)a better inform.

Thank you again...

Anonymous said...

Dear Smart Buyer
I am looking at a studio investment property along Rangoon road area i.e. Opp the new Mediplex that will be build up. This area seemed to be quieter and isolated from the masses flowing thru the south of Farrer Park MRT. There are several properties such as R66, Urban Loft, Citigate coming up along this stretch that is quite near the MRT. Can you give me your thoughts on this - psf and the rental yield?
Best wishes

Anonymous said...

what do you think of rosewood suites at woodland? i was quoted for 650k for a 1001square foot unit. i find it too expensive especially at this time. what is your opinion? thanks

Anonymous said...

Dear Smart buyer,

Have been looking out to buy a 4-room resale HDB flat since 2008. Have been told by friends that flats are overpriced and not a good time with rocket high COV. Over time, the government come in to mark up the valuation price and COV are moderated lower by the seller. I am confused if I wait longer will I be servicing more mortgage loans with higher price. So should I just go in and buy one unit now as I am worried the wait do not bear any savings but price either the same or higher.

Anonymous said...

Hi Smart Buyer,

I need some advice from you. Been scouting for a resale HDB (3 room or 4 room) since Sept 2008. Then the COV is rocket high, seller asking for 50k above val. Friend around say it is silly to buy at such high price. I waited and observe the market, towards end 2008, the COV drop but instead the flat val went up. So I don't find any difference. I would like to be a prudent buyer to buy at a moderate price. Now into 2009, after reading your blog, it seems like lower-end HDB price may not drop due to downgraders in the loom economic. So I really want you to help me analyse, should I just go into buy or should I wait slighter longer since I have waited for a year.

Anonymous said...

Hi !

I would like to find out from you on any good condo(s) to keep a lookout at D19 and D15 ?

Many thanks!

Smart Buyer said...

Dear all Anonymouses,
Apologies for the delay in my reply. I've been really busy recently starting a small business.

1. I'll try to find time to do a thorough research on condos in rangoon, D19-16, and keep a watch on what's good and keep you guys posted here. In general, I think the sign is still "not yet" time to buy.

2. I do agree the at 650K, rosewood suite is still expensive.

3. I'd go ahead and buy my resale HDB if I were you. I really don't see huge price moderation for small HDB flats. It's just my guess. Ps exercise your own judgement.

Best wishes to all.

Anonymous said...


I am interested in The Esta Condo located at Amber Road. Currently , the price is about $850-$880 psf.. Wana know what the bottom price in the past (during the property crash 1998) around that area?

Anonymous said...

Hi smart buyer,

I shared your views that price moderation will not swing much for HDB flats. However, I see that after the government intervene to make purchase easier for people with little cash by increase the valuation to last transaction price to defray high asking COV by seller. In the light of this, seller are still asking for high COV today. Will the seller lower this COV in the coming months knowing the buyers ability to pay high COV in a bad economic times is unrealistic.

Anonymous said...

I like to share my situation with you regarding my house. My HUDC flat is going to privatize soon and if the estate is privatize, my flat value is esclate from $550K to $800K, same as privatized estate like Eunos and Shunfu villes house price. If I manage to sell my house at $800K and I can buy a privatized HUDC flat at Tampines Court for $580K, is it a good buy and a good swapped? I can earned $220K and wait for en-bloc from TC.
Another option is I can buy a resale HDB flat and rent out or sell my HUDC flat when it is privatize and I can buy TC for investment for rental and wait for en-bloc to come.
But I have a problem as my protem committee is taking its own sweet time to get the estate to privatize so the residents have no choice but wait for this estate to privatize.
So when the estate is privatized, many residents are anxious to sell their HUDC flat at high price and look for alternative plans after that.

Anonymous said...

In the situation when market deteriorate, wouldn't buyer be better off buying a FH condo rather than picking up a hudc at 800K?

Anonymous said...

My feeling is that if you can sell your house and buy the privatised HUDC, why would a buyer buy your house in the first place if he has the option to buy the privatised HUDC? Just my opinion.

Anonymous said...

I don’t understand why there is a buyer who brought $845K for a HUDC flat at the privatized estate of Shunfu Ville and Eunos Ville residents are also advertising their HUDC at $800+. These sellers will be very happy to get a high price of $800+ and they can look at alternative plan to get another better house for $800+.
Look at Laguna Park HUDC, if the estate can get a developer to buy their estate, each unit can get $1.2 to $1.5 million, same as Farrer Court HUDC.
But at today property market, it is very difficulty to find a buyer willing to buy this property at this high price but it is still happening at privatized estate. What is your opinion?

Anonymous said...


I am really keen on buying a unit at the centris but I do not know how to start. Is it possible to buy directly from the owner and not having to pass through an agent?

Smart Buyer said...

Of course you can bypass agents and buy from owner Look for ads by owners, put your buyer's message in the letter boxes .. Some owners are willing to pass the agency fee to you.

However, agents may help to filter ugly encounters with owners who get upset in the negotiation.

Note that in general, buyers do not pay commission. It's the sellers who pay commission.

Good luck.

CondoSearch said...

just read this article and like to share with people here

Extract some of it from Today news!

Buyers, sellers at impasse

Owners still asking for sky-high prices while bank valuations fall

Loh Chee Kong /

A DOWNTURN is usually the time for bargain-hunters to snap up properties on the cheap. But for now at least, the reality could not be more different, as prospective buyers discover.
Said Ms K Chan, a HDB dweller looking to upgrade to a condo: “I thought this would be a good time to pick up a good bargain. But owners are still asking for sky-high prices.”
According to industry players, the volume of transactions in the last month or so has dropped to a level only witnessed during the Sars outbreak when the market was practically frozen.
The reason? A growing gap between falling bank valuations — which determine how large a bank loan buyers can take — and high asking prices by highly-geared sellers needing to pay off their outstanding loans.
A random check by Today on 15 homes for sale — condos and various landed property types spread across the island — found stark differences between what owners are asking for and preliminary valuations by independent professionals.
While it is normal for initial asking prices to be higher than the conservative value banks attach to a property, in six cases that Today found, the valuations were less than two-thirds of the asking price.
For instance, while an owner of a four-storey bungalow in Holland Grove Drive was asking for $ 7.2 million, his property was valued at just $3.3m. Likewise, a Caribbean at Keppel Bay unit valued at about $700,000 was being touted for sale for $1.1m.
SUBHD: ‘Better for sellers to cut losses now’

The bank forecasts mid-tier to high-end residential property prices here to fall another 35 per cent, bringing “prices back to 1998 levels”. For prices of luxury properties such as Ardmore Park, the fall would be even steeper – up to 60 per cent from their peaks two years ago, Citi estimates.
Noting the current general scarcity of cash, Mr Tan said: “For sellers, maybe it’s better for them to cut losses now, rather than take a bigger loss later on. But sometimes you have geared up so much, the situation is out of your hands – you are stuck.”
you can get full story at

still an indication to wait and be patient.

Anonymous said...


This is exactly the website i have been looking for all this weeks.

I am a first-time flat buyer. Recently I have the chance to buy a repurchased hdb flat. There were not many choices left and I had paid OTP for this 5 rm flat in tanglin halt road( commonwealth view). The selling price is $510k and my greatest concern is that it is at 3rd floor and very near to a primary school. The biggest advantage for us is that it is close to commonwealth mrt( we only take public transport)

I will like to ask 1) due to the recession, is it advisable to buy this flat. (we need a roof urgently and are worried that if we miss this chance, we might not have another chance as new hdb flats that are built near mrt and near central seldom come by and balloting is time-comsuming and lady luck dependant) ( but at the same time we are worried that our rice bowls will not be safe in the coming months)

2)In your opinon, if we are to sell this flat 5-10 yrs down the road, will we get more that the 510k valuation? (will circle line remotely increase the valuation?)

3) I reckon it will be extremely difficult to sell as it is on 3rd floor and very close to a pri school right?

4) We plan to rent out 2 rooms if possible, but we are not sure whether there will still be a demand for rental rooms in this recession


Smart Buyer said...

Dear Anonymoust,

1) Unless you see your household income adversely affected due to the recession, it's quite futile to speculate about the future given that you need a home urgently now. In my opinion, a home, unless an investment, is more than just money-making concern. The most important thing is to make sure you buy within your means.

2) If Singapore economy recovers and continues to grow, then property price should logically appreciates. Do you have faith in the future of Singapore?

3) Low floor and near school may be an attraction to some buyers, eg those with young children. So I won't say it is definitely a disadvantage.

4) Rental demand will likely drop with the recession. If you're depending on the rental income to finance your mortgage, perhaps you should do your calculations more carefully.

Anonymous said...

Thank you very much for the sound advices.

May I also inquire whether in SG's property history have prices for new HDB flats ever fallen below their intial selling price? (will it fall below what we intitially bought it for at 510k?)

In your opinon, do you think it can and will happen these few years?

Anonymous said...


Thank you for the advices. May I ask

1) Have HDB prices for new flats ever fallen in their entire history?

Smart Buyer said...

Yes, HDB prices for new flats fell below the initial HDB sale price during the 1998-Asian financial crisis. There was a huge over-supply then. The govt has learned this time. They will only build when there is order, so the 1998-over-supply situation is unlikely to happen this time.

It is possible for resale price to fall below your purchase price of $510K if the recession gets really bad and many people lose their jobs.

Anonymous said...

Hello Smart Buyer,

I came across this website and find the information available here very helpful, especially for prospective investors like myself. I am a foreigner intending to buy a property in Singapore to have it rented out, as an investment. I have two questions that I would like to ask.

First, as a foreigner, do I have to declare and pay income tax derived from the rent?

Second, if I sell off my property in the future and make a capital gain, is there any capital gain tax that I have to pay? Would this differ if I transact a few properties within a year?

Smart Buyer said...

Dear Anonymous,
As a foreigner, like all other residents, you'll have to pay income tax on your rental income. To the best of my knowledge, capital gain tax has been removed. (It was implemented in 1996 to curb property speculation which sent property price sky-high and subsequently removed during the property downturn.)

Post a Comment

Dear visitors:
Your comments are most welcome!

The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)